Traditional coal sources are relatively high in sulfur. For example, Ohio coal is “dirty” and typically contains about 3.5% sulfur, and its use has been significantly limited by The Clean Air Act Amendments of 1990 (the “CAAA”). This limitation has resulted in a significant reduction in the use of these traditional coals from the Appalachian area, Illinois basin, Ohio, Kentucky, etc. There has been a movement by the electric power plants in these areas to replace the high-sulfur local coals with Powder River Basin (PRB) coal which typically contains about 0.3% sulfur. The heating value of PRB coal is significantly lower and the cost of transporting it by rail to the areas of use in these Eastern and mid-Western states is expensive.
Therefore, there is a vast amount of coal that is not being utilized due to its high sulfur content. For example, according to the Department of Energy, Ohio mines about 28 million tons of coal annually and consumes 60 million tons annually for its domestic electric power generating needs. Ohio is ranked third in the nation for its coal consumption for electric power generation. Replacing coals like the PRB coal with “clean-burning” Ohio coal could double the current size of the industry back to the levels of the 1970s, when Ohio produced about 55 million tons per year. According to the United States Geological Survey, Ohio's demonstrated coal reserves currently about 24 billion tons.
There are numerous coal-fired electric power generating plants in the Eastern and mid-Western states that, like the Ohio plants, have had to switch a portion of their coal supplies to PRB coal or other coal with lower sulfur content in order to meet the requirements of the CAAA. In addition, the limits on sulfur emissions are becoming more difficult and more expensive to meet.